Renters (Reform) Bill

Baroness Lister of Burtersett Excerpts

2nd reading
Wednesday 15th May 2024 Lords Chamber

[Baroness Lister of Burtersett (Lab)]

My Lords, I am grateful to the Minister for last week’s very helpful drop-in briefing session, which was particularly helpful for those of us who cannot claim expertise in housing law. I come to the issue from my long-standing concern about poverty. A growing proportion of those in poverty live in the private rented sector, and as many as 46% of children living in the sector are in poverty after taking account of housing costs. The failure to uprate local housing allowance annually as a matter of course does not help, especially at a time of spiralling rents, which the Bill will do little to curb. Issues of affordability and security are of particular importance to those whose housing options are limited by lack of money, or by vulnerable circumstances such as those stemming from domestic abuse or disability. For all too many, homelessness is then the outcome.

I would therefore like to be able to welcome the Bill, and indeed there are some welcome provisions, including the expansion of the homelessness prevention duty, and the creation of a decent homes standard for the PRS. Nevertheless, the 20 leading housing organisations which make up the Renters Reform Coalition are clear that it fails to achieve the White Paper’s promise of quality, affordability and fairness, and comes from the Commons watered down and fundamentally weakened. Their concerns are echoed in most of the many other briefings received, for which I am grateful.

I applaud the aim articulated by the Minister at our briefing to create a fairer balance of power between landlords and tenants. However, according to the coalition, the Bill

“preserves the central power imbalance at the root of why renting in England is in crisis”.

Moreover, as the National Residential Landlords Association stresses, quoting the Law Society, without investment in housing legal aid

“the Bill will not achieve its aims”,

and neither tenants nor landlords may be able to enforce their legal rights, a point raised too by Crisis and the Large Agents Representation Group. To enforce their rights, tenants first need clearer information, as the TDS Charitable Foundation argues. If local authorities are to deploy their enforcement powers effectively, they need adequate resources to do so.

To put it charitably, the indefinite pause on the abolition of Section 21 is disappointing to say the least, and increases the vulnerability faced by, for example, older tenants, renters with children, and domestic abuse survivors. Justice challenges the idea that the courts are not ready. I hope that at a minimum, we might be able to subject total abolition to a clearer timeline.

However, I was also struck by the coalition’s plea to us to focus on the inadequacies of the new tenancy system proposed by the Bill. In particular, it is concerned that first, the notice period remains at only two months, despite over 100 council leaders urging an increase to four months, and the Government’s initial highlighting of the short eviction notice period as an important factor in why reform is needed. Secondly, the coalition is concerned that the period of protection against eviction under grounds 1 and 1A remains at six months rather than the two years proposed in the Government’s original 2019 consultation. This will not provide the greater security promised. Its third concern is the lack of strong legal safeguards to prevent abuse of the new grounds for eviction. In addition, my inbox has been flooded by emails from students who fear that their exclusion from the Bill’s safeguards will mean, among other things, that they will in effect remain subject to Section 21-type evictions in all but name.

One provision that I warmly welcome is making illegal the introduction of a blanket ban on renting to tenants in receipt of social security benefits or with children, which will widen the protection that already exists in theory for those with protected characteristics. However, if the Government’s aim that

“no family is discriminated against”

is to be achieved, I hope that they will consider amendments put forward by Shelter to ensure that landlords cannot indirectly discriminate against social security claimants by making a new tenancy unaffordable. This is all the more important given the provision in the data protection Bill that could mean landlords’ bank accounts being made open to scrutiny if the LHA is paid directly to them, thereby making them even more reluctant to rent to tenants on social security. I am pleased to see the noble Viscount, Lord Younger, in his place as I make that point. The amendments would place a limit on rent in advance, restrict the scenarios under which a landlord could legitimately require a guarantor, and remove the requirement to prove intent to discriminate.

In addition, reflecting the principle enunciated earlier by the Minister, Justice recommends that the provision should be extended to prevent blanket bans on other groups which have experienced discrimination, such as prison leavers and non-UK passport holders. The latter, I would suggest, points to the abolition of right-to-rent checks.

Another group particularly vulnerable to the power imbalance that exists between landlords and tenants is disabled people. Disability Rights UK, Inclusion London and many other groups have raised concerns about the proposed change to the definition of anti-social behaviour as grounds for eviction. As we have heard, instead of

“conduct causing or likely to cause a nuisance or annoyance”,

the Bill proposes to define it as behaviour “capable of causing” nuisance or annoyance to a person, and so hearsay evidence will become admissible. They fear that the new wording could be open to interpretation in such a way as to cover some behaviour of, for example, neurodiverse people and those with learning disabilities or experiencing mental distress. The admissibility of hearsay evidence could open disabled people up to potential abuse, harassment or even extortion.

The briefing also raises concerns about the implications of the new wording for those experiencing domestic abuse, as do Generation Rent and the Domestic Abuse Housing Alliance—DAHA. The former points out:

“Victims and survivors of domestic abuse are more likely than other tenants to have ASB complaints made against them”.


Given the considerable concern, can the Minister please explain the justification for the new wording? As the “capable of causing” formulation is being removed today from the Criminal Justice Bill, will she undertake to reconsider its usage here in this Bill?

Two other main issues have been raised in relation to domestic abuse victims and survivors. One concerns what has been dubbed the “tenant trap”, introduced by the government amendment that means that tenants cannot end a contract during the tenancy’s first six months, as we have already heard. It was welcome that the Minister in the Commons confirmed that there will be an exemption for domestic abuse victims and survivors, as the Minister here mentioned in her opening remarks, but we do not yet know what it will be. Can she tell us more, including whether the exemption will be included in the Bill itself? It is important that it is. Can she assuage the anxiety of DAHA that it will require tenants taking court action, which is likely to take too much time and money for it to be an effective remedy for those who have good reason to leave a property before six months?

The other issue relates to the new repeated rent arrears ground for eviction. Both Generation Rent and DAHA warn that victims and survivors of domestic abuse are particularly likely to be in rent arrears, especially if they have been and/or continue to be subject to economic abuse. Moreover, because this ground for eviction is mandatory, judges will not be able to use their discretion where, for instance, the arrears can be linked to abuse. I hope that the Minister will be willing to take another look at that issue. We cannot have a Bill which purports to offer greater housing security threatening even greater insecurity for those in vulnerable circumstances, such as domestic abuse survivors.

Another group of renters who face especially vulnerable circumstances is those living with a tenant who has died. Surely the idea that the death of a tenant can constitute grounds for eviction is unconscionable, when we think of what the bereaved survivor will be going through. Marie Curie argues that the Bill offers an opportunity to bolster protections and rights for grieving private renters, but that, in its current form, it would actually make the situation of bereaved renters worse. I hope that the Minister can also take a look at that.

In conclusion, on Report in the Commons, the Minister referred to his willingness to

“listen to suggestions for how we can improve the Bill”.—[Official Report, Commons, 24/4/24; col. 987.]

Unfortunately, in too many cases, that listening has resulted not in improving but in weakening the Bill, so that it neither provides tenants with the security originally promised nor adequately tackles what the impact assessment calls the “systemic issues” that underpin their poor experience. It would be a real shame if the improvements the Bill does contain are overshadowed by the clauses that take us backwards. I hope that we will be able to make changes in line with the Government’s original intention to strengthen tenants’ security and achieve a fairer balance of power between tenants and landlords.

--- Later in debate ---

[Baroness Swinburne (Con)]

I assure the noble Baroness that those discussions are already ongoing. The department is in intense discussions with that sector, and has been since the introduction of the Bill in the other place.

Regarding MoD accommodation, as a result of discussions in the other place we are looking to apply the decent homes standard to homes for service personnel and their families. Service personnel and their families deserve homes that are safe and decent, just like everybody else. While 96% of service family accommodation already meets the decent homes standard, it is right that we explore whether we can put in further safeguards on housing quality for this sector. However, there are features in service accommodation that mean that we must consider carefully the approach that will work best in practice. This includes the fact that significant proportions of this accommodation are located on secure military sites. The department is therefore working closely with the Ministry of Defence and local authorities to urgently explore these matters and work out how this can be done.

The noble Baroness, Lady Pinnock, and others raised local authority funding. We are fully aware that local authorities need to prioritise taking enforcement action against criminal landlords and that it is essential to the effective implementation of the reforms. We are taking steps to facilitate and resource action against landlords who flout the rules. The new property portal will support local authorities in their enforcement action. It will provide information sources to enable local authorities to take action, and we are extending ring-fenced penalties to support a “polluter pays” approach. We will also ensure that net additional costs that may fall on local authorities are fully funded, and we have already taken action to support local authorities now. Our pathfinder programme has allocated £14 million to test innovative ways to create sustainable enforcement teams that can be shared across all local authorities. In addition, our healthy homes project provides funding for local authorities to test ways of increasing the compliance of landlords in tackling damp and mould.

On pet notice periods, while I appreciate that tenants will want their requests answered as quickly as possible, 28 days seems to be too short, following discussions. A landlord could be on holiday or there may be other reasons why they have not responded within a 28-day period. Therefore, we suggest that 48 days gives reasonable time for landlords but prevents them delaying indefinitely.

Regarding affordability, the local housing allowance and rent increases, some noble Lords rightly highlighted concerns about the affordability of housing; others expressed their concern about being able to charge market rates—I will try to try cover both of those points. We recognise the cost of living pressures that tenants face and that paying rent is likely to be a tenant’s biggest monthly expense. The Government are investing £1.2 billion in restoring local housing allowances, and raising them, and that significant investment means many of these low-income households will gain a significant amount of money to help them towards their rental costs. For those most in need, discretionary housing payments are available to help meet housing costs, and the household support fund has been extended to March 2024 to help with the cost of essentials. I will check those dates for the House—I just said March 2024 and we are beyond that, so I will check and make sure we correct it.

[Baroness Lister of Burtersett (Lab)]

September.

[Baroness Swinburne (Con)]

I thank noble Lords.

Some noble Lords were concerned that the Bill restricts landlords’ ability to charge a market rent. I will be very clear: this Government do not believe in rent controls, unlike the noble Baroness, Lady Jones. Nothing in this Bill prevents landlords increasing rents to the market rate each year or dictates what rent they can charge at the start of a tenancy. Tenants can appeal above-market-rate increases to the First-tier Tribunal, which will make an objective assessment and determine whether to raise, or indeed lower, the proposed rent. The noble Lord, Lord Marlesford, referred to the First-tier Tribunal—I think he wanted it to go. We are working closely with the Ministry of Justice and the judiciary to assess the impact on the First-tier Tribunal of this new Bill. We anticipate that the reforms will lead to an increase in cases, but we will ensure that the tribunal has the capacity to deal with these cases.

Regarding overall supply, noble Lords asked what measures in the Bill will mean for supply in the private rental sector. I will try to reassure noble Lords—if not today, maybe as we go through the Bill—including the noble Lords, Lord Frost and Lord Carrington, and the noble and learned Lord, Lord Etherton, that there is no evidence to suggest that a fairer private rental sector for tenants and landlords will lead to a reduction in supply. The statistics I have from the department suggest that the sector doubled in size from 2004, peaking in 2016, and has remained roughly stable since then; we will continue to monitor the impacts. New costs to landlords are expected to amount to a tiny fraction of average annual rents, at approximately £10 per landlord in England. We are by no means complacent and recognise the vital role that good landlords play in providing homes for millions of people across the country. That is why the Bill requires the department to provide an annual update to Parliament on the state of the private rented sector, to include stock, size and location of properties.

With regards to social housing supply, noble Lords have heard me talk at this Dispatch Box, on a number of occasions, about the affordable homes programme of £11.5 billion. I will not rehearse those arguments today in the interests of time, but they underpin the supply part of the equation. Since 2010, there have been an additional 482,000 affordable homes for rent, of which 172,600 are for social rent.

On retired clergy, the right reverend Prelate the Bishop of Chelmsford raised concerns that the Church of England Pensions Board will no longer be able to evict existing tenants to house retired clergy. The way this has been achieved until now is through the use of Section 21, which we are abolishing. Ground 5 allows landlords to evict tenants from properties which are usually held to allow ministers of religion to perform their duties when needed again for that purpose. She is therefore correct that the ground will not apply in situations where they wish to house retired clergy. We have carefully considered the needs of tenants and religious organisations when reviewing the grounds for possession, and we believe that the ground balances the unique needs of the sector—ensuring that religious ministers can occupy properties where needed to carry out their duties—with the rights of existing tenants.

I will write to the noble Baronesses, Lady Pinnock and Lady Warwick, about the ground 1B impact on social landlords and how we will select the administrator for the PRS ombudsman. I bow to the experience of ombudsmen of the noble Baroness, Lady Warwick, which is much greater than mine, but I can tell her that the Bill allows for government either to select a scheme through an open competition or to appoint a provider to deliver a designated scheme. To reiterate, we have not made a final decision on what is happening, and we are not ruling out the possibility of delivering this through alternative provision. Our priority is choosing a provider that offers a high-quality, value-for-money service. I will seek the clarification that she has asked for and will revert with more detail on the process being used as discussions continue on the Bill.

On the cost of the ombudsman, which the noble Lord, Lord Marlesford, raised, it is right that the landlords pay for this scheme. It is in line with common practice for funding other redress schemes, including for social landlords, who pay some £5.75 per unit for membership of the Housing Ombudsman scheme. We will ensure that the fee for private rental is proportionate and good value.

On portal offences, local authorities will have a duty to enforce where landlords fail to comply with their portal obligations. Tenants who become aware that a landlord is, for example, not registered on the portal or has provided inaccurate information can contact their local authority so that they can take the appropriate enforcement action.

I reassure the noble Lord, Lord Truscott, that we recognise the importance of having a healthy supply of private rented homes at affordable prices in all parts of the country, which is why we are taking decisive steps to stop short-term lets undermining the supply of long-term homes for local people. This includes abolishing the furnished holiday lettings tax regime, introducing a national mandatory register of short-term lets, and introducing a new planning use class for short-term lets.

On the suggestion by the noble Lord, Lord Adonis, that we should introduce a specialist housing court, we do not think that this is the best way to improve the court process for possession. This view is shared by the judiciary, which responded to our call for evidence. A new housing court would not address the concerns raised by landlords, such as the timeliness and complexity of the processes. We are committed to reforming the court system instead. Indeed, the majority of tenancies end without ever going to court. For those that do, where court reform is necessary, we will make sure that the system is working. The new system will have great new training for the analogue system to do the immediate new contracts, followed by digitisation. I am a lot more optimistic that new, large digitisation projects can now be delivered on time, and I am confident that we will be able to scope and deliver this as quickly as needed.

If it is okay with the House, I will continue, as there is not much left. On the portal duplicating the work of selective licensing, unlike the property portal, selective licensing schemes aim to target specific local issues by enabling more intensive, proactive enforcement strategies. The two are therefore complementary and do not prevent each other from working.

The question from the noble and learned Lord, Lord Etherton, was very detailed and, I am sure, very precise. I will write to him on it once my department’s legal experts have had time to consider his points—otherwise, I am in danger of stepping into waters that I cannot.

With regard to the comments on guarantors, we recognise that some tenants have difficulties in meeting such requirements. The use of guarantors and upfront rent can give landlords confidence to rent to individuals they might otherwise not choose to, but we will continue to carefully monitor both practices, to ensure that they are not having an adverse effect on the market. We have already committed to limiting upfront rent through the Tenant Fees Act if necessary.

With regard to the death of a tenant, we are extending the period for ground 7 to be used. The Government are aware that tenants who have been living in a property for a while may reasonably believe that they have a right to remain living there, which is why we have introduced an extension from 12 to 24 months to help resolve cases where disputes might arise, particularly for grieving tenants.

With regard to legal aid, which was mentioned by the noble Baronesses, Lady Thornhill and Lady Lister, the Ministry of Justice is investing an additional £10 million a year in housing legal aid through the non-means-tested Housing Loss Prevention Advice Service—HLPAS—to give people the best chance of keeping their home when they fall into difficult financial times. Through this scheme, tenants can receive free, non-means-tested advice as soon as they receive written notice that their landlord is seeking possession of their home. The MoJ is funding a panel of specialist legal advisors to provide grant funding for the recruitment of trainee solicitors to support that endeavour. Free on-the-day legal help will continue to be available when a tenant is facing the loss of their home at a possession hearing in the county court.

It is true that private landlords must meet existing minimum efficiency standards—the MEES regulations—which are set at EPC E. Although we will not tighten that requirement, as we have in the social sector, we will work with landlords. We are currently investing some £6 billion this Parliament and a further £6 billion to 2028 on making buildings cleaner and warmer; this is in addition to the £5 billion that will be delivered through the energy company obligation, ECO4, and the Great British insulation scheme up until March 2026. Landlords can and should participate in these schemes to upgrade their properties.

In conclusion, I thank all noble Lords—